There are so many side hustles out there that Canadians continue to try out for passive income. Honestly, I’m one of them. I’ve tried out several different side hustles in my spare time just to try and make a bit of extra spending money. And if I’m totally honest, not many have worked — hence why I don’t write about them.
That being said, there’s a very simple way to increase your passive income by 9.5% on average, according to a study by Indeed taken in the United Kingdom. And that’s to quit.
Well, not exactly
I mean, you’ll have to quit eventually if this pans out. But this survey found that those who changed jobs every two to three years increased their salary by about 9.5% on average. Rather than going to their boss and constantly asking for a raise and more responsibility, they sought it out elsewhere.
This, of course, has several benefits. You’re focusing on career growth, making sure you’re paid what you’re worth and providing more income to your household. And, to be clear, these numbers certainly add up. Let’s look at what someone making $55,000 per year could end up making over a decade, compared to their counterpart, who receives a 2% raise each year to combat inflation.
| Year | Salary with inflation | Percentage Increase | Salary while leaving a job every third year |
| 1 | $55,000 | 0% | $55,000 |
| 2 | $56,100 | 2% | $56,100 |
| 3 | $57,222 | 9.5% | $61,429 |
| 4 | $58,366 | 2% | $63,272 |
| 5 | $59,533 | 2% | $64,537 |
| 6 | $60,724 | 9.5% | $67,764 |
| 7 | $61,938 | 2% | $69,120 |
| 8 | $63,177 | 2% | $70,502 |
| 9 | $64,441 | 9.5% | $77,200 |
| 10 | $65,730 | 2% | $78,744 |
As you can see, you would be making about $13,000 more than your counterpart on an annual basis by this point!
But don’t spend it!
Now, if you need the cash to pay off debts, then I totally understand spending it. However, if you’re able to fund your current lifestyle using your old salary, do it. This can create a huge increase in income to put towards your retirement, emergency fund, and near-term savings.
Each year, as you continue to bring in more income, your savings will grow. This will allow you to invest in your future, and the best options when it comes to stocks are dividend stocks. These will create even more passive income for you to invest.
With that, here is the best long-term option I would consider.
Try BMO stock
Bank of Montreal (TSX:BMO) stock is an excellent option for long-term investors with this method. By using the extra money that you’ve made from switching jobs, you can put it towards a solid Canadian bank that has long-term growth options.
BMO stock has many long-term growth options currently underway. The largest right now is the recent purchase of Bank of the West. The stock managed to sneak in there just before the United States stated there would be no more large acquisitions from outside companies in the United States. While this left other Canadian banks in the lurch, BMO stock now has a major growth opportunity on its hands.
Meanwhile, BMO stock trades at just 11.3 times earnings with a dividend yield of 5.21% as of writing. That’s a large amount of passive income to add on top of the already large amount you created from switching jobs.
So, don’t just hope for more money. It’s time to act! Get what you deserve and make even more money while you’re at it by investing in dividend stocks.
